Guide to Starting and Operating a Small Business | 2018 Guide to Starting and Operating a Small Business - Page 14

4. Write a Business Plan In spite of the fact that one of the major reasons for business failures is lack of planning, just mentioning the task of “writing a business plan” makes many aspiring (and existing) entrepreneurs cringe. There’s no question it does take time and commitment for researching, organizing information, evaluating, and writing down your actionable plan. So why should every entrepreneur go to the trouble of creating a written business plan? 1. If you’re looking for financing or investment, lenders and investors require a written plan. A complete business plan provides the information needed and communicates your ideas to others, as the basis of a financial proposal. A decision on whether to extend financing or investment will be based on all the information in the business plan, not just thefinancials. 2. But the most important reason is YOU! It’s not enough to “have it all in your head” since ideas and thoughts aren’t a plan. What’s in your head is ideas, and they are like clouds that change form from minute to minute. The process of putting a business plan together, including the information gathering and analysis, organizing and writing down the information you’ve discovered combined with your ideas and measurable goals forces you to see the business project in its entirety, including its strengths and shortcomings. 3. Writing your business plan is a virtual simulation. Before you invest a chunk of money, it allows you to get to know the economic environment, test the financial scenarios, identify and locate your markets, figure out the what/how/when/why of operations and management, and more. It allows you to consider and adjust for needs or opportunities. Writing a business plan can reduce your risk and increase your chances for success! 4. Once launched, your written business plan is a management tool: It provides benchmarks and milestones you can use to measure your success; it is also a tool to remind management of the business goals as well as communicate them to employees as a means to keep everyone heading in the same direction. Most everyone needs help in putting a business plan together and that’s where your SBDC Consultant becomes your personal, confidential thought partner! There are also several well-written brochures and books available at libraries and bookstores for guidance. Most large accounting firms have manuals available. Various legal and financial consultants are listed online. For more assistance, an individual request for business consulting and a schedule of MI-SBDC workshops or seminars on business planning, visit: www.SBDCMichigan.org MI-SBDC Business Plan Overview Cover Page Table of Contents Executive Summary Section 1 – Company Information Section 2 – Market Analysis/Marketing and Sales Section 3 – Management and Operations Section 4 – Financials Appendix 12